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Shell Nigeria officials accused of masterminding oil spills for their benefit

Officials of SPDC have been accused of allegedly masterminding the damage to oil pipelines.

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Officials of Royal Dutch Shell’s Nigerian subsidiary have been accused of allegedly masterminding the damage to oil pipelines so as to benefit from the money spent on repairs and clean-up operations.

According to a report from Reuters, this disclosure is contained in a report from a Dutch investigative TV programme, Zembla, on Thursday, December 9, 2020.

The report, while citing research by Dutch environmental group Milleudefensie, specifically revealed that employees of Shell Petroleum Development Company of Nigeria (SPDC) recruited local youth to destroy the pipelines and then went to hire them back as workers to clean up the oil spillage.

However, Shell in its reaction, said it investigates all credible reports of misconduct and takes action where needed.

Shell’s Dutch head office stated, “As of now, we are not aware of any staff or contractor having been involved in acts causing oil spills in the Niger Delta.’

The Dutch TV investigative programme also alleged that this was brought to the notice of officials of Shell and the Dutch ambassador to Nigeria by local leaders in 2018, they refused to act on those warnings.

Milieudefensie, in a statement on Thursday, disclosed that the focus of its research was on the village of Ikarama, where it said had experienced about 30 oil spills in the last 13 years.

It said, “The majority of the leaks in Ikarama were the result of instructions given by Shell Nigeria employees.’’

While citing statements made to the police and Nigeria’s Ikarama Youth Council by witnesses and other participants, Zembia pointed out that the profit made on the cleaning operations was shared between SPDC employees and the youths.

What you should know

  • Shell Petroleum Development Company has been subject of various accusations of negligence that has caused oil spillages from their facilities by host communities in the Niger Delta region of Nigeria.
  • This has led to various lawsuits instituted against Shell for various degrees of pollution and devastation of the environment with loss of means of livelihood for the community.
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COMMODITIES

China’s data disappoints, as oil prices fall

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China, the second-largest oil consumer globally, posted a slightly poor economic report which clouded the fuel demand outlook in the near term.

An earlier report by Caixin showed China’s manufacturing purchasing managers’ index (PMI) was 50.3 in July, lower than expected. On Saturday, manufacturing and nonmanufacturing PMIs came in at 50.4 and 53.3 respectively.

Business activity in the country has slowed due to higher raw material costs, equipment maintenance, recent floods, and the latest outbreak of COVID-19.

Asia’s biggest economy had been recovering at a rapid pace but if this recent slowdown deepens, the outlook will fall significantly. The outlook for crude demand is shaky, and that is unlikely to change until global vaccination rates improve.

Investors also looked forward to more oil production from the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

Brent crude oil futures fell 1.05% at the time of writing this report and WTI crude oil futures fell 0.92%. According to reports, OPEC’s oil production rose to its highest level since April 2020 in July. Efforts to reduce production curbs will be further eased from August 1. Since then, Saudi Arabia has progressively ceased its voluntary supply cut.

There continues to be an increase in COVID-19 cases on a daily basis. A higher vaccination rate could however prevent the need for restrictive measures that caused fuel demand to plummet in 2020.

There will be no lockdown as the Delta variant of the virus fuels an outbreak of cases in mainly unvaccinated populations, but the situation is escalating, U.S. officials report.

The daily gasoline consumption of India, the third-biggest oil importer globally, exceeded pre-COVID-19 levels in July. While COVID-19 lockdowns were relaxed across the country, gas oil sales were low, indicating a sluggish industrial outlook.

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COMMODITIES

Gold mining: Segilola mine produces first gold output, targets 85,000 ounces a year

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Segilola Gold Mine, Nigeria’s first and largest industrial-scale gold mine owned by the Canadian mineral exploration company, Thor Explorations Limited poured its first gold from the mine in Osun state on Friday.

This was disclosed in a statement by Thor Explorations, reported by Bloomberg.

This represents a major step towards diversifying and maximizing Nigeria’s gold mineral reserves. The Canadian company has spent $100 million to build the mine, while Africa Finance Corp, its largest shareholder, provided $86 million in debt and equity financing.

The company added that the plant, which will now ramp up over the next six weeks, is targeting an output of 85,000 ounces a year, which is still below African gold mining outputs from the two biggest gold projects in Africa – Barrick Gold Corp’s Kibali in the Democratic Republic of Congo and Loulo-Gounkoto in Mali – which produced 808,000 ounces and 680,000 ounces respectively in 2020, according to Bloomberg.

Minister of Mines Olamilekan Adegbite also disclosed on Friday that Segilola Mine “proves to the mining world that Nigeria is the next big frontier mining destination,” adding that it is a testament to the Buhari’s administration drive to diversify the economy through the mining sector.

What you should know

Recall it was reported earlier this year that Segilola Gold Mine, Nigeria’s first and largest industrial-scale gold mine owned by the Canadian mineral exploration company, Thor Explorations Limited, is set to be completed in the first half of 2021.

The gold mine tagged “Segilola” is a high-grade gold project being developed in Osun state, Nigeria. It is expected to hasten Nigeria’s economic diversification and reduce unemployment among the youth populace.

Thor Explorations Limited announced that a set of encouraging drill results from its in-pit and extensional diamond core drilling program revealed that the gold mine is on course to pour its first gold in Q2 2021.

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COMMODITIES

Dangote Sugar grows 2021 half-year revenue by N29 billion

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Dangote Sugar Plc, a subsidiary of Dangote Industries has declared revenue of N131.95 billion in the half-year period of 2021, reflecting a growth of 27.82% compared to N103.23 billion recorded in the same period of 2020.

This is according to the company’s latest financial statements for the second quarter of 2021.

Similarly, the financial report, revealed that net income increased by N1.03 billion, reflecting a growth of 8.89% from N11.58 billion recorded in the corresponding period of 2020 to N12.61 billion in the current period.

The company generates its revenue through the sale of sugar, molasses and freight income. The notes to account further revealed that the sale of sugar constitutes the majority of revenue recorded during the period while freight income generated the least income for the company.

Furthermore, the company’s management was able to cut down certain expense line items such as depreciation, management expenses, direct labour costs and overhead, and selling and distribution expenses for the period. However, raw material costs increased from N61.58 billion to N83.77 billion year on year.

More than 10% of total sales made during the period were from Nigerian Bottling Company and Seven-Up Bottling Company Limited. These companies purchased industrial non-fortified sugar from Dangote Sugar Plc. Meanwhile, 35% of sales made during the period were to industrial users such as manufacturers of confectioneries and soft drinks.

Other income for the period, however, declined from N409.68 million in 2020 to N128.91 million in the current period. This was due to the significant reduction in the provisions no longer required in its financial statement.

The statement of financial position revealed that the company holds a healthy financial position as net assets during the period stood at N119.09 billion.

Backstory

Recall that, in December 2020, the board of Dangote Sugar Refinery Plc, successfully wound up its sugar business in Niger State.

The decision was made in an effort to cut down on deadweight cost, coming from a stretched situation from its host community which had started accumulating negative returns for the integrated sugar business.

What you should know

Dangote Sugar Refinery Plc is one of Nigeria’s leading integrated sugar companies, and a major refiner of raw sugar with a key focus on the production of fortified and non-fortified granulated white sugar.

The company has a total installed capacity of 1.44 million metric tons (MT) per annum with key expansion plans in place.

Its operational activities aside from sugar production include the distribution of refined white sugar to consumers and industrial customers in the country, and also the exportation of its products to other West African countries.

In Q1, Dangote Sugar Refinery Plc reported a growth of 41.46% in revenue. In the same vein, net profit for the period grew by 30.30% from N6.37 billion to N8.30 billion.

Dangote Sugar Plc is currently trading at N18.50 per share and its market capitalization stands at N225 billion as of Friday, July 30, 2021. Year-to-date performance shows that the share price of the company has grown by 5.11%.

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